Sandoz Pays $12.6 Million to Settle Medicare Price Misrepresentation Charges

Generics maker Sandoz will pay out $12.64 million to settle accusations it misrepresented average sales price information in reports to Medicare.

The settlement is the largest drug pricing civil penalty ever paid out, HHS’ Office of Inspector General said.

The settlement absolves Sandoz of accusations it misrepresented average sales price data between January 2010 and March 2012 that it is required to send to the Centers for Medicare & Medicaid Services. CMS uses the information to set payment amounts for Medicare Part B covered drugs, and faulty information can cause Medicare to overpay.

Sandoz must also certify that it has created a government pricing compliance program. The settlement did not require the drugmaker to admit guilt or liability.

The Novartis subsidiary has run afoul of the price reporting requirements before. In December 2011, the company paid $230,000 to settle charges of late reporting of pricing information. — Bryan Koenig